Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), was recently blasted by Congress, as lawmakers accused him of "kneecapping" capital markets and failing to provide clarity on crypto regulation.
Recall that the last few years have seen an endless series of regulatory actions from the US SEC.
The regulatory agency has gone after several companies and individuals in the crypto industry including Ripple, Coinbase, CZ and Binance among others.
Let's go over what happened this week in Congress, as US lawmakers gave Gary a slight taste of his own medicine.
According to reports, the U.S. SEC chairman found himself in front of legislators on September 27, during a planned hearing to talk about his organization's approach to regulating financial markets (like crypto).
And it was epic!
Gary Gensler, the head of the SEC, was criticized for "kneecapping" the capital markets in the United States and for avoiding inquiries about Bitcoin and Pokemon cards.
The US. Representative, Andy Barr fired at Gary, who accused the latter of "kneecapping" or hindering the U.S. capital markets with regulatory actions and endless lawsuits.
During the hearing, Andy Barr compared Gensler to the disgraced figure skater Tonya Harding, who hired someone to attack her rival, Nancy Kerrigan, during the 1994 US Figure Skating Championships.
Barr was referring to a previous testimony from Gensler in which he argued that the U.S. is the largest, most sophisticated, and innovative capital market in the world and that it shouldn't be taken for granted.
"With all due respect, Mr. Chairman, if the U.S. capital markets are a gold medalist, you are the Tonya Harding of securities regulations,"
– Andy Barr
Barr's comparison of Gary to Harding is a scathing one, and it suggests that he believes that Gensler is harming the U.S. capital markets.
As if Andy Barr's scathing remarks weren't enough, Rep. Warren Davidson (R-OH) went even further, calling for Gary to be fired.
"I wish the Biden administration would say, 'You're fired,'" Davidson said. "You're making the case for this bill [the SEC Stabilization Act] every day you're acting as the chairman."
If you didn't know, the SEC Stabilization Act, introduced by Davidson and Rep. Tom Emmer (R-MN), is a bill that would limit the SEC's power to regulate cryptocurrencies.
Davidson accused Gary of abusing his position and using his position to advance a progressive or "woke" political and social agenda.
Davidson's accusations are serious, and they suggest that he believes that Gensler is not acting in the best interests of the U.S. capital markets.
Gensler was also pressed on his statement that Bitcoin is not a security. "Bitcoin does not meet the Howey test, which is the law of the land," Gary said.
However, when asked whether Bitcoin is a commodity, Gensler avoided answering. Instead, he mentioned that the test for whether Bitcoin is indeed a commodity is outside the scope of U.S. securities laws.
Gary was also asked about his interpretation of what an investment contract is.
Rep. Ritchie Torres (D-NY) also asked Gary: If a person bought a physical Pokemon trading card, does this mean that they have just bought a security?
"Suppose I was to purchase a Pokemon card. Would doing so constitute a security transaction?"
In response, Gary said: "I don't know what the context is,"
Torres went further to ask whether purchasing an NFT version of a Pokemon card on a digital exchange like Opensea is a security transaction.
"I'd have to know more," Gensler replied.
Torres called Gensler's answers "evasions" and said they were "deafening and damning."
Gensler's testimony before Congress was confusing at best.
He reiterated that Bitcoin is not a security, but avoided answering whether it is a commodity. He also provided unclear answers about whether certain types of NFTs could be considered securities.
Gensler's testimony also comes at a time when the SEC is facing increasing pressure to provide clarity on how it will regulate cryptocurrencies.
As the days roll by, it remains to be seen how Gary will respond to the criticism he faced from lawmakers. However, his testimony suggests that he is open to the possibility of regulating some types of cryptocurrencies as securities.
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